A financial adviser can make a lot of sense for some investors. Our expert tells you how to decide if it is right for you.

NEW YORK (Money) -- Question: My wife and I are working parents in our mid-40s. We max out our company savings plans and currently have about $200,000 in various 401(k) and IRA accounts.

We're considering hiring a financial adviser to manage our retirement investments at a cost of 1.2 percent of assets per year. Is this a wise thing to do? Any other options we should be considering? - N.F., Illinois

Answer: Deciding to hire an adviser to oversee your investments really comes down to a realistic assessment of whether managing your money is something you can and would handle on your own. I don't think that managing a retirement portfolio the size you're talking about requires huge amounts of investment expertise.

But if you don't feel comfortable doing it on your own - whether because you don't have the time, the inclination or you're just uneasy about going solo - then hiring an adviser probably makes sense. It's certainly a better way to go than just picking investments on a whim or relying on the latest recommendations of some TV pundit.

True, the fee you pay - whether it's 1.2 percent or some other amount - will lower the return you get on your investments. But if you expect someone to put in the time and effort that you don't want to expend, you've got to expect to pay them for their time and expertise.

Before I signed on with any one adviser, however, I'd want to interview at least three and go over a number of issues with each of them so I end up with an adviser whose strategy is simpatico with my risk tolerance and goals, whose fee seems reasonable and someone I feel I can work with.

Let's talk money

So the first thing I'd want to discuss is how my money is going to be invested. In fact, even before we got to talking about investment strategies and specific investments, I'd expect to have a discussion with the adviser about when I expect to retire and what sort of risks I'm comfortable taking.

After that discussion, the adviser should be able to recommend a portfolio mix of stocks and bonds that makes sense for your situation - and ideally should show you how that mix has performed historically in different types of markets.

I'd also want to be sure about exactly what amount I'm paying in fees. Is the 1.2 percent the total fee? Or will you pay that amount in addition to management fees or other charges on the underlying investments? (Certainly 401(k) assets, such as mutual funds, will have their own set of management fees.)

What services other than investing your money can you expect for that fee? Will you receive monthly or quarterly reports on your portfolio's progress? What will those reports tell you? (Ask for a sample.)

Will you have access to the adviser for periodic updates on your accounts? If so, how often will those updates occur, and will they be face-to-face or by phone? And will you talk to the adviser or another staffer?

Generally, I'd say that the 1.2 percent annual fee you mentioned is in the ballpark for what advisers charge to manage a portfolio the size yours is. I'd estimate that 1 percent to 2 percent is a reasonable range. But once you've talked to a few advisers, you'll have a sense of what you're getting from each adviser for whatever he or she is charging.

Explore other options

There are some other options you can consider, however. The first thing I'd do is to see if your 401(k) plan offers some sort of investing and planning advice. Many 401(k)s now do, and that number is likely to increase as last year's Pension Protection Act effectively makes it easier for plan sponsors to provide advice and guidance to 401(k) participants. The kind of advice that's offered can range from meetings with advisers to managed account programs that invest your 401(k) funds to online programs that can help you build a portfolio. In some cases, the advice can take into account money held in outside accounts like IRAs. At the very least, you should see what services, if any, your 401(k) offers and what they cost.

Another alternative you might consider is a target-retirement fund. You won't have an adviser you can meet with and discuss investments. But a target-retirement fund will give you a coherent investment strategy for your retirement savings. Essentially, you choose a target fund with a date that roughly corresponds to the date you intend to retire - say, 2025 or 2030 in your case - and you get a completely diversified portfolio of stocks and bonds. Even better, the fund becomes more conservative as you approach retirement age by gradually shifting its asset mix more toward bonds. (For more on how these funds work, click here.)

Of course, you'll have to see if your 401(k) offers target funds, as a growing number of plans do. And even if your plan does, that will cover only the assets in your 401(k) plan. Still, if you like this approach, you can invest your IRA money in a separate target-date fund. Many large fund companies offer such funds and you may be able to get virtually the same fund you have in your 401(k) through the same investment company. If not, no big deal. Just invest your IRA assets in a target-fund with a similar asset mix to the one in your plan. (We've included the target funds of two companies - Vanguard and T. Rowe Price - in our MONEY 70 list of recommended funds.)

So I suggest you check to see if your 401(k) plan offers any advice and at the very least I think you ought to consider a target-retirement fund. If in the end you decide you'd rather work with an adviser, that's fine. But do a little legwork there too before hiring one to assure you're getting the services you want at a reasonable fee.

Have you retired recently? How are you coping with money issues and all the extra free time? Tell us your story for an upcoming feature in Fortune Magazine. Send e-mails to ellen_florian@fortunemail.com.